-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WumCg8UEkYkyTE66oPT5P9YYNt/ZKDvLCuJzhqC7hEXGm+zC2yIAFZ4kLoSvUGfW DZuqZ163hTD0EVQA2fYFwg== 0001275287-05-001559.txt : 20050428 0001275287-05-001559.hdr.sgml : 20050428 20050428102505 ACCESSION NUMBER: 0001275287-05-001559 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050427 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050428 DATE AS OF CHANGE: 20050428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMREIT CENTRAL INDEX KEY: 0000913957 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 760410050 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31397 FILM NUMBER: 05778643 BUSINESS ADDRESS: STREET 1: 8 GREENWAY PLAZA STREET 2: STE 824 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7138501400 MAIL ADDRESS: STREET 1: 8 GREENWAY PLAZA STREET 2: STE 824 CITY: HOUSTON STATE: TX ZIP: 77046 FORMER COMPANY: FORMER CONFORMED NAME: AMREIT INC DATE OF NAME CHANGE: 19981123 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN ASSET ADVISERS TRUST INC DATE OF NAME CHANGE: 19931022 8-K 1 am2562.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------- Date of Report (Date of earliest event reported) April 27, 2005 Commission File Number 0-28378 AmREIT ------------------------------------------------------ (Exact name of registrant as specified in its charter) TEXAS 76-0410050 ------------------------------- ----------------------- (State or other jurisdiction of (IRS Employer Incorporation or organization) Identification No.) 8 Greenway Plaza, Suite 1000, Houston, Texas 77046 713-850-1400 ---------------------------------------- ------------------------------- (Address of principal executive offices) (Registrant's telephone number) [N/A] ------------------------------------------------------------ (Former name or former address, if changed since last report) ================================================================================ Item 2.02. Results of Operations and Financial Condition On April 27, 2005 the Company issued a press release announcing its financial results for the first quarter ended March 3, 2005. A copy of the press release issued by the Company is attached hereto as Exhibit 99.1. Attached as Exhibit 99.2 to this report are the slides which accompany this press release. Also, attached as Exhibit 99.3 to this report is the Supplemental Financial Information which accompanies this press release. The Company's press release announcing its financial results for its first quarter ended March 31, 2005 contains non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP. Pursuant to the requirements of Regulation G, the Company has provided quantitative reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The press release attached to this Form 8-K as Exhibit 99.1 shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section. Item 9.01. Financial Statement and Exhibits Exhibits. The following exhibits are furnished as part of this current report on Form 8-K: 99.1 Press release dated April 27, 2005 99.2 Slide presentation 99.3 Supplemental Financial Information SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AmREIT By: /s/ Chad C. Braun -------------------------------------- Chad C. Braun, Chief Financial Officer Dated: April 27, 2005 EX-99.1 2 am2562ex991.txt Exhibit 99.1 AmREIT REPORTS FIRST QUARTER RESULTS; ON TRACK WITH 2005 GUIDANCE - Revenues Increased 87.9% to $8.2 million - Loss Per Share of $0.08 - Funds From Operations of $0.13 Per Share HOUSTON, April 27 /PRNewswire-FirstCall/ -- AmREIT (Amex: AMY), a Houston-based real estate investment trust, reported financial results for the first quarter of 2005 today. Revenues for the first quarter increased 87.9 percent to $8.2 million compared to $4.4 million for the first quarter of 2004. This increase was due to additional portfolio revenue of $2.9 million (attributed to property acquisitions made in the third and fourth quarters of 2004), additional real estate operating, and development revenue of $627,000, additional securities commission income of $218,000 and additional retail partnership revenue of $42,000. AmREIT reported a net loss attributable to class A shareholders of $274,000 for the quarter compared to a loss of $1.2 million for the first quarter of last year (which was attributed to the $1.3 million deferred merger charge). For the first quarter, AmREIT's loss before discontinued operations per class A common share was $0.18 compared to a loss of $0.66 per share for the first quarter of 2004. The income from discontinued operations for the quarter was $0.10 per class A common share compared with income of $0.26 per class A common share for the first quarter of 2004. The company's net loss per class A common share for the quarter was $0.08 compared to a net loss of $0.40 for the same period last year. Diluted earnings per share information is not applicable due to the anti-dilutive nature of the class B, C and D common shares. Funds From Operations (FFO) for the first quarter were $444,000, or $0.13 per class A common share. This compares to FFO of ($0.32) per class A common share including a non-cash deferred merger charge of $0.45 per share for the first quarter of 2004. Because there were no non-operational, non-cash charges to earnings during the first quarter 2005, there are no adjustments to FFO. The reported first quarter 2005 FFO remains in line with the previously announced management guidance range of $0.68 to $0.72 per share for the full year 2005. A reconciliation of net income to FFO is included in the financial tables accompanying this press release. During the quarter, total assets increased slightly to $205 million from $203 million reported on December 31, 2004. Total liabilities decreased 13 percent to $99.4 million during the first quarter, from $113.7 million at year-end. "We set forth specific, growth oriented goals for 2005. We have built a quality team of individuals that have produced results quarter over quarter," said Chad Braun, AmREIT's executive vice president and chief financial officer. "Our commitment to Irreplaceable Corners and focus on fundamental real estate quality, combined with powerful business structure should allow us to accomplish our goals as we continue to execute our business plan." Outlook for 2005 In their annual report, AmREIT set forth four key goals and expectations for this year: -- The first goal is continued per share growth in FFO with a target range of 8-14 percent. Supported by the increase in rental revenue generated by the acquisitions made during the third and fourth quarters 2004, as well as the increase in fees and profits generated from supporting business segments, the annual target FFO guidance remains $0.68 to $0.72 per class A share. Dividends declared for class A common shares during the first and second quarter of 2005 were $0.124 and $0.124 respectively, which is line with managements 2005 guidance of $0.50 to $0.52 per share. -- The second goal is to have total asset growth of $200 million within a 12 to 18 month period. The real estate pipeline remains robust, and AmREIT remains on track to achieve 100 percent growth between December 2005 and June 2006. AmREIT's strategy is to expand holdings of multi- tenant properties and today, a majority of rental revenue is generated from multi-tenant shopping centers. As this strategy is executed, the company will continue to evaluate and dispose of those assets that are no longer core assets, replacing them with multi-tenant shopping centers, lifestyle and grocery-anchored centers and single tenant leases on what are believed to be Irreplaceable Corners. -- The third goal is to raise $125 to $150 million for our REIT and an additional $35 million in private equity. Through March 31, 2005, the company raised approximately $20 million through its class D common share offering, which is on track with its 2005 goals. -- The fourth goal is to continue to strengthen portfolio quality by selling non-core assets and keeping debt to total assets under 55 percent. During the first quarter of 2004, AmREIT sold $940,000 in non-core assets helping to reduce tenant concentration and increase the dependability of rental income. As of March 31, 2005, no single tenant represented more than 10 percent of total revenue, and the company's total liability to total asset ratio was approximately 48.4 percent. AmREIT updates earnings guidance on a quarterly basis. Conference Call AmREIT will hold its quarterly conference call to discuss first quarter results Thursday, April 28, at 10:00 am Central Time (11:00 am Eastern Time). Interested parties are encouraged to access the live webcast by visiting the investor relations page of AmREIT's website at http://www.amreit.com. The dial-in number for the call is 1-800-299-7098, passcode AmREIT. The call will also be available for replay for 30 days by dialing 1-888-286-8010, passcode 25044753, or by going to the investor relations events page of the company's Web site. The company has published additional forward-looking statements in its first quarter 2005 supplemental information package that may help investors estimate earnings for 2005. A copy of the company's first quarter 2005 supplemental information will be available on the company's web site at http://www.amreit.com or by written request to Robyn Walden, Investor Relations, AmREIT, 8 Greenway Plaza, Suite 1000, Houston, Texas, 77046. The information provided in the supplemental package is unaudited and there can be no assurance that the information will not vary from the final information for the quarter ended March 31, 2005. AmREIT may, but assumes no obligation to, update information in the supplemental package from time to time. About AmREIT AmREIT (Amex: AMY) is a real estate investment trust ("REIT") focused on the ownership, development and management of Irreplaceable Corners(TM) - defined as premier retail frontage properties typically located on "Main & Main" intersections in highly populated, high-traffic, affluent areas. Our portfolio consists of shopping centers anchored by market dominant tenants such as Kroger, Barnes & Noble and Walgreens and are supported by specialty retailers such as GAP, Starbucks, Hallmark and Verizon. Our business structure is unique within the REIT community and consists of a real estate operating and development business, a securities company and a merchant development retail partnership business. These synergistic businesses support our portfolio of Irreplaceable Corners, and, along with our deep professional talent pool, allow the company access to multiple avenues of low-cost capital which can then be deployed efficiently and accretively for our shareholders. Through the retail partnership funds, AmREIT captures recurring development, leasing, property management, and asset management fees for services performed while maintaining an ownership interest and profit participation. Our business structure allows the company to expand both internally and externally, distinguishing AmREIT as a value creator, a growth company, and a source of dependable, monthly income. In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which AmREIT operates, management's beliefs and assumptions made by management. Past performance is not indicative of future returns. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. This press release does not constitute an offer to sell, or the solicitation of an offer to buy any public or private securities from the Company. The purchase of any securities may only be made pursuant to a prospectus. A copy of any available prospectus and the related subscription documents are available to qualified potential investors on request. For more information, call Robyn Walden, Vice President Investor Relations of AmREIT, at (713) 850-1400, or Chad Braun, Chief Financial Officer of AmREIT, 713-850-1400. AmREIT is online at http://www.amreit.com. Operating Results (in thousands, except share and per share data) (Unaudited) Three Months Ended March 31, ----------------------- 2005 2004 ---------- ---------- Revenues: Rental income from operating leases $ 4,313 $ 1,521 Earned income from direct financing leases 507 508 Real estate fee income 994 367 Securities commission income 2,123 1,905 Asset management fee income 117 75 Interest and other income 188 11 Total Revenues 8,242 4,387 Expenses: General operating and administrative 1,652 1,201 Property expense 729 209 Legal and professional 579 328 Securities commissions 1,633 1,424 Depreciation and amortization 1,097 225 Deferred merger costs - 1,320 Total Expenses 5,690 4,707 Operating Income (loss) 2,552 (320) Income from retail partnerships and other affiliates 31 15 Federal income tax expense (34) (171) Interest expense (1,517) (620) Minority interest in income of consolidated joint ventures (15) (44) Income (loss) before discontinued operations 1,017 (1,140) Income from discontinued operations 341 775 Net income (loss) 1,358 (365) Distributions paid to class B, C and D shareholders (1,632) (813) Net loss available to class A shareholders $ (274) $ (1,178) (in thousands, except share and per share data) (Unaudited) Three Months Ended March 31, ----------------------- 2005 2004 ---------- ---------- Reconciliation of Net Income (loss) before discontinued operations to Funds From Operations ("FFO"): Income (loss) before discontinued operations $ 1,017 $ (1,140) Income from discontinued operations 341 775 Depreciation - from operations 955 223 Depreciation - from discontinued operations 13 21 Gain on sale of real estate held for investment (250) - Class B, C and D distributions (1,632) (813) FFO available to class A shares $ 444 $ (934) Basic and Diluted Per Class A Share Data: Loss before discontinued operations $ (0.18) $ (0.66) Income from discontinued operations $ 0.10 $ 0.26 Net loss $ (0.08) $ (0.40) FFO $ 0.13 $ (0.32) Distributions per class A share $ 0.12 $ 0.12 Distributions per class B, C and D share $ 0.52 $ 0.36 Weighted average class A common shares used to compute net income per share, basic and diluted 3,471,028 2,952,984 Weighted average number of class B common shares outstanding 2,228,906 2,351,682 Weighted average number of class C common shares outstanding 4,075,319 2,108,719 Weighted average number of class D common shares outstanding 3,057,077 - Balance Sheet Highlights (in thousands) (Unaudited) March 31, December 31, 2005 2004 ------------ ------------ Real estate held for investment, net $ 153,387 $ 157,031 Net investment in direct financing leases 19,218 19,219 Real estate held for resale, net 9,925 6,326 Total assets 205,475 203,151 Notes payable 92,751 105,964 Total liabilities 99,373 113,666 Minority interest 1,105 1,115 Total shareholders' equity 104,997 88,370 Non-GAAP Financial Disclosure This press release contains certain non-GAAP financial measures that management believes are useful in evaluating an equity REIT's performance. AmREIT's definitions and calculations of non-GAAP financial measures may differ from those used by other equity REIT's, and therefore may not be comparable. The non-GAAP financial measures should not be considered as an alternative to net income as an indication of our operating results, or to net cash provided by operating activities as a measure of our liquidity. AmREIT considers FFO to be an appropriate measure of the operating performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses from sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. AmREIT calculates its base FFO in accordance with this definition. AmREIT adjusts its FFO calculation by adding back non-cash charges to earnings, such as the issuance of stock in conjunction with the payment of deferred merger costs and impairment charges on real assets, resulting in its adjusted FFO. The Company considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company's real estate between periods, or as compared to different companies. FFO is not defined by GAAP and should not be considered as an alternative to net income as an indication of our operating performance or to net cash provided by operating activities as a measure of our liquidity. FFO and adjusted FFO as disclosed by other REITs may not be comparable to AmREIT's calculation. Projected FFO is calculated in a method consistent with historical FFO, and AmREIT considers projected FFO to be an appropriate supplemental measure when compared with projected EPS. A reconciliation of the projected FFO to projected EPS per share is provided below: Projected 2005 Range ----------------- Historical High Low 12/31/04 ------- ------- ---------- Net loss available to class A shareholders $ (0.48) $ (0.62) $ (1.19) Depreciation and amortization 1.35 1.35 0.61 Less loss on sale of real (0.15) (0.05) (0.04) FFO available to class A shareholders 0.72 0.68 (0.62) Impairment charges - - 0.74 Deferred merger costs - - 0.51 Adjusted FFO $ 0.72 $ 0.68 $ 0.63 SOURCE AmREIT -0- 04/27/2005 /CONTACT: Robyn Walden of AmREIT, +1-713-860-4964, rwalden@amreit.com/ /Web site: http://www.amreit.com / EX-99.2 3 am2562ex992.txt Exhibit 99.2 [GRAPHIC APPEARS HERE] First Quarter 2005 Earnings Call & Webcast Thursday, April 28th 2005 Delivering Dependable Monthly Income [LOGO OF AMREIT] Through Irreplaceable Corners(TM) STRONG AND FLEXIBLE BUSINESS MODEL [GRAPHIC APPEARS HERE] . AMEX: AMY [GRAPHIC APPEARS HERE] . 20-Year history . 33% total 2004 shareholder returns . Irreplaceable Corner(TM) shopping centers REIT Portfolio . High barriers to entry . Texas & Southwest REOD Business . Fully integrated and wholly owned . Management fees and asset gains flow back to REIT . NASD registered Securities Business . Flexible capital structure . Controlled daily capital flow to REIT and Partnerships Retail Partnership . Advisory fees flow to REIT Business . Profit participation for REIT . Expands real estate relationships 2 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] Good Things Happen on Great Real Estate(TM)... 2005 Goals . 8-14% FFO growth per share . $200M total asset growth in 12-18 months . Raise $125-$150M for REIT and $35M in private equity . Sell non-core assets and remain below 55% leveraged 3 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] What Drives Our Growth? [GRAPHIC APPEARS HERE] Our Goal: To become the leading company in generating dependable increasing monthly income 4 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] What Differentiates Our Structure? [GRAPHIC APPEARS HERE] . Disciplined focus on Irreplaceable Corners(TM) . Internal capital raising ability . Ability to capture income from retail partnership funds 5 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] First Quarter '05 Financial Highlights . Net Loss of $0.08 per class A share - Compared to a Net Loss of $0.40 in 1Q04 . FFO of $0.13 per class A share - On track with annual target of $0.68-$0.72 per class A share . Dividend paid of $0.124 per class A share - Represents annualized yield of 6.1% . Raised ~$20 million in non-traded class D shares 6 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] 1Q Net Income Contribution Total Net Income: $1.36M .. $1.24M REIT Portfolio .. $213,000 Real Estate Operating & Development Business .. $(153,000) Securities Business .. $80,000 Retail Partnership Business 7 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] Disclaimer Statements included in this presentation that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking" statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which, by their nature, involve known and unknown risks and uncertainties. The company's actual results, performance or achievements could differ materially from those expressed or implied by such statements. Reference is made to the company's regulatory filings with the Securities and Exchange Commission for information or factors which may impact the company's performance. 8 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] Contact Us H. KERR TAYLOR Chairman & CEO ktaylor@amreit.com CHAD BRAUN Chief Financial Officer [PICTURE APPEARS HERE] cbraun@amreit.com ROBYN WALDEN VP Investor Relations rwalden@amreit.com www.amreit.com 1-800-888-4400 9 GOOD Things Happen on GREAT Real Estate(TM) [LOGO OF AMREIT] EX-99.3 4 am2562ex993.txt Exhibit 99.3 [LOGO OF AMREIT] - -------------------------------------------------------------------------------- SUPPLEMENTAL FINANCIAL INFORMATION MARCH 31, 2005 (Unaudited) TABLE OF CONTENTS PAGE # ----------------- ------ Corporate Profile 1 Consolidated Balance Sheets 2 Consolidated Statement of Operations 3 Consolidated Statement of Operations - Segments 4 Summary of Operating Results 5 - 6 Funds From Operations Dividends - All Classes of Common Shares Rental Income Real Estate Revenue Allocation Interest Expense Summary Balance Sheet Information 7 Common Share Data Capitalization Debt Information 8 - 9 Outstanding Balance and Terms Fixed and Variable Rate Debt Other Information 10 - 12 Property Table Tenant Diversification Lease Expiration Schedule This Supplemental Financial Information package contains historical information of the Company and is intended to supplement the Company's Annual Report on Form 10-K for the year ended December31, 2004, and its unaudited quarterly financial statements as of and for the period ended March 31, 2005. All financial information in this Supplemental Financial Information package is shown in thousands, except for per share data and share information. Certain information contained in this Supplemental Financial Information package includes certain forward-looking statements reflecting AmREIT's expectations in the near term that involve a number of risks and uncertainties; however, many factors may materially affect the actual results, including demand for our properties, changes in rental and occupancy rates, changes in property operating costs, interest rate fluctuations, and changes in local and general economic conditions. Accordingly, there is no assurance that AmREIT's expectations will be realized. CORPORATE PROFILE: AmREIT (AMEX: AMY) is a real estate investment trust ("REIT") focused on the ownership, development and management of Irreplaceable Corners(TM) - defined as premier retail frontage properties typically located on "Main & Main" intersections in highly populated, high-traffic, affluent areas. Our portfolio consists of shopping centers anchored by market dominant tenants such as Kroger, Barnes & Noble and Walgreens and are supported by specialty retailers such as GAP, Starbucks, Hallmark and Verizon. Our business structure is unique within the REIT community and consists of a real estate operating and development business, a securities business and a merchant development retail partnership business. These synergistic businesses support our portfolio of Irreplaceable Corners, and, along with our deep professional talent pool, allow the company access to multiple avenues of low-cost capital which can then be deployed efficiently and accretively for our shareholders. Through the retail partnership funds, AmREIT captures recurring development, leasing, property management, and asset management fees for services performed while maintaining an ownership interest and profit participation. Our business structure allows the Company to expand both internally and externally, distinguishing AmREIT as a value creator, a growth company, and a source of dependable, monthly income. CORPORATE OFFICE: 8 Greenway Plaza, Suite 1000 Houston, Texas 77046 (800) 888-4400 (713) 850-0498 (fax) www.amreit.com STOCK EXCHANGE: American Stock Exchange - AMY 1 BALANCE SHEETS:
MARCH 31, DECEMBER 31, 2005 2004 ------------ ------------ ASSETS Real estate investments at cost Land $ 67,168 $ 68,138 Building 85,961 88,211 Tenant improvements 4,248 4,243 ------------ ------------ 157,377 160,592 Less accumulated depreciation and amortization (3,990) (3,561) ------------ ------------ 153,387 157,031 Real estate held for sale, net 9,925 6,326 Net investment in direct financing leases 19,218 19,219 Investment in retail partnerships and other affiliates 1,877 1,979 ------------ ------------ Net real estate investments 184,407 184,555 Cash and cash equivalents 3,891 2,960 Tenant receivables 1,900 1,338 Accounts receivable 485 37 Accounts receivable - related party 1,535 910 Deferred costs 1,027 1,040 Intangible lease cost, net 10,238 10,628 Other assets 1,992 1,683 ------------ ------------ TOTAL ASSETS $ 205,475 $ 203,151 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Notes payable $ 92,751 $ 105,964 Accounts payable and other liabilities 3,862 4,830 Below market leases, net 2,393 2,504 Security deposits 367 368 ------------ ------------ TOTAL LIABILITIES 99,373 113,666 ------------ ------------ Minority Interest 1,105 1,115 Shareholders' Equity Preferred Shares, $.01 par value, 10,000,000 shares authorized, note issued - - Class A Common shares, $.01 par value, 50,000,000 shares authorized, 3,493,328 and 3,462,767 shares issued, respectively 35 35 Class B Common shares, $.01 par value, 3,000,000 shares authorized, 2,215,722 and 2,246,283 shares issued, respectively 22 22 Class C Common shares, $.01 par value, 4,400,000 shares authorized, 4,083,276 and 4,079,174 shares issued, respectively 41 41 Class D Common shares, $.01 par value, 17,000,000 shares authorized, 4,103,087 and 2,090,765 shares issued, respectively 41 21 Capital in excess of par value 122,013 104,114 Accumulated distributions in excess of earnings (15,741) (15,038) Deferred compensation (1,359) (770) Cost of treasury shares, 9,116 Class A shares (55) (55) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 104,997 88,370 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 205,475 $ 203,151 ============ ============
2 STATEMENTS OF OPERATIONS
THREE THREE MONTHS MONTHS ENDED ENDED MARCH 31, MARCH 31, 2005 2004 ------------ ------------ Revenue: Rental income from operating leases $ 4,313 $ 1,521 Earned income from direct financing leases 507 508 Real estate fee income 994 367 Securities commission income 2,123 1,905 Asset management fee income 117 75 Interest and other income 188 11 ------------ ------------ Total revenues 8,242 4,387 ------------ ------------ Expenses: General and administrative 1,652 1,201 Property expense 729 209 Legal and professional 579 328 Securities commissions 1,633 1,424 Depreciation and amortization 1,097 225 Deferred merger costs - 1,320 ------------ ------------ Total expenses 5,690 4,707 ------------ ------------ Operating income (loss) 2,552 (320) Other income (expense): Income from retail partnerships and affiliates 31 15 Federal income tax (expense) benefit for TRS (34) (171) Interest expense (1,517) (620) Minority interest in income of consolidated joint ventures (15) (44) ------------ ------------ Income (loss) before discontinued operations 1,017 (1,140) Income from discontinued operations 341 167 Gain on sales of real estate acquired for resale - 608 ------------ ------------ Income from discontinued operations 341 775 ------------ ------------ Net income (loss) 1,358 (365) Distributions paid to class B,C, and D shareholders (1,632) (813) ------------ ------------ Net loss available to class A shareholders $ (274) $ (1,178) ============ ============ Net (loss) income per class A common share - basic and diluted Loss before discontinued operations $ (0.18) $ (0.66) Income from discontinued operations 0.10 0.26 ------------ ------------ Net loss $ (0.08) $ (0.40) ============ ============ Weighted average class A common shares used to compute net (loss) income per share, basic and diluted 3,471 2,953 ============ ============
3 SEGMENTED OPERATIONS - FOR THE THREE MONTHS ENDED MARCH 31,
Real Estate Retail 1Q 2005 Portfolio Operations Securities Partnerships Total - ----------------------------------- ------------ ------------ ------------ ------------ ------------ Rental Income $ 4,795 $ 25 $ - $ - $ 4,820 Securities Commissions - - 2,123 - 2,123 Real Estate Fee Income - 994 - - 994 Other Income 140 48 - 117 305 ------------ ------------ ------------ ------------ ------------ Total Revenue 4,935 1,067 2,123 117 8,242 Securities Commission Expense - - 1,633 - 1,633 Depreciation and Amortization 1,097 - - - 1,097 Property Expense 729 - - - 729 Professional Fees 314 95 16 425 Real Estate Commissions - 154 - - 154 Other expenses 329 661 623 39 1,652 ------------ ------------ ------------ ------------ ------------ Total Expenses 2,469 910 2,272 39 5,690 Other income (expense) (1,566) 33 (4) 2 (1,535) Income From Discontinued Operations 318 23 - - 341 ------------ ------------ ------------ ------------ ------------ Net Income (loss) $ 1,218 $ 213 $ (153) $ 80 $ 1,358
Real Estate Retail 1Q 2005 Portfolio Operations Securities Partnerships Total - ----------------------------------- ------------ ------------ ------------ ------------ ------------ Rental Income $ 2,029 $ - $ - $ - $ 2,029 Securities Commissions - - 1,905 - 1,905 Real Estate Fee Income - 367 - - 367 Other Income 11 - - 75 86 ------------ ------------ ------------ ------------ ------------ Total Revenue 2,040 367 1,905 75 4,387 Deferred merger expense 1,320 - - - 1,320 Securities Commission Expense - - 1,424 - 1,424 Professional Fees 141 16 11 - 168 Depreciation and Amortization 225 - - - 225 Property Expense 209 - - - 209 Real Estate Commissions - 160 - - 160 Other Expenses 265 338 582 16 1,201 ------------ ------------ ------------ ------------ ------------ Total Expenses 2,160 514 2,017 16 4,707 Other income/ (expense) (665) (166) (4) 15 (820) Income From Discontinued Operations 110 665 - - 775 ------------ ------------ ------------ ------------ ------------ Net Income (loss) $ (675) $ 352 $ (116) $ 74 $ (365)
4 AmREIT SUMMARY OF OPERATING RESULTS
THREE MONTHS ENDED MARCH 31, ---------------------------- 2005 2004 ------------ ------------ FUNDS FROM OPERATIONS: Income (loss) before discontinued operations $ 1,017 $ (1,140) Income from discontinued operations 341 775 Depreciation of real estate assets - operations 955 223 Depreciation of real estate assets - discontinued operations 13 21 Gain on sale of real estate acquired for investment (250) - Class B, C, and D common share distributions (1,632) (813) ------------ ------------ Total Funds from Operations available to Class A Shareholders $ 444 $ (934) ============ ============ Weighted Average Class A Shares Outstanding 3,471,028 2,952,984 Funds From Operations per Class A Share $ 0.13 $ (0.32)*
* The above FFO amount does not add back the non-cash deferred merger charge of $0.45 per share, which would have resulted in Adjusted FFO of $0.13 per class A common share.
THREE MONTHS ENDED MARCH 31, ---------------------------- 2005 2004 ------------ ------------ DIVIDENDS: Class A Dividends per Share $ 0.124 $ 0.116 As a Percentage of FFO 95.4% 89.2% Non-Traded Common Shares: Class B Common Share Dividends per Share (1) $ 0.19 $ 0.19 Class C Common Share Dividends per Share (2) $ 0.17 $ 0.17 Class D Common Share Dividends per Share (3) $ 0.16 $ -
(1) The class B common shares receive a cumulative preferred dividend, fixed at 8%, payable quarterly. The shares are currently convertible on a one for one basis into our class A common shares, and are callable by the Company beginning in July 2005 on a one for one basis, or $10.18 in cash at the holders option. (2) The class C common shares receive a preferred dividend, fixed at 7%, payable monthly. The shares are convertible into our class A common shares based on 110% of invested capital (i.e. $1,000 in class C common shares will convert into $1,100 in class A common shares) after the seventh anniversary of issuance (beginning in 2010). The class C common shares are callable by the Company beginning in 2006, based on the same conversion formula (110% of invested capital). (3) The class D common shares receive a preferred dividend, fixed at 6.5%, payable monthly. The shares are convertible into our class A common shares based on 107.7% of invested capital (i.e. $1,000 in class C common shares will convert into $1,077 in class A common shares) after the seventh anniversary of issuance (beginning in 2011). The class D common shares are callable by the Company beginning in 2005, based on the same conversion formula, prorated for the time outstanding (107.7% of invested capital). 5
THREE MONTHS ENDED MARCH 31, ---------------------------- 2005 2004 ------------ ------------ RENTAL AND EARNED INCOME: Base minimum rent $ 3,326 $ 1,267 Earned Income from direct financing leases 507 508 Straight line rent 70 26 Over/Under market rent 67 - Percentage rent 84 65 Tenant reimbursements 766 163 ------------ ------------ Total Rental and Earned Income $ 4,820 $ 2,029 ============ ============
THREE MONTHS ENDED MARCH 31, ---------------------------- 2005 2004 ------------ ------------ REAL ESTATE OPERATING REVENUE: Development and construction management fees Retail partnerships and affiliates $ 165 $ 306 Unrelated third parties 19 - Leasing and brokerage commissions Retail partnerships and affiliates 565 - Unrelated third parties 222 50 Property management fees Retail partnerships and affiliates 23 11 Unrelated third parties - ------------ ------------ Total Real Estate Operating Revenue $ 994 $ 367 ============ ============ Percent attributable to retail partnerships and affiliates 75.8% 86.4% Percent attributable to unrelated third parties 24.2% 13.6%
THREE MONTHS ENDED MARCH 31, ---------------------------- 2005 2004 ------------ ------------ INTEREST EXPENSE: Interest paid - floating rate $ 462 $ 177 Interest paid - fixed rate 1,111 443 Out-of-market debt amortization (56) - ------------ ------------ Total Interest Expense $ 1,517 $ 620 ============ ============
6 AmREIT SUMMARY BALANCE SHEET INFORMATION MARCH 31, DECEMBER 31, 2005 2004 --------- ------------ CLASS A COMMON SHARE DATA: Closing Market Price $ 8.09 $ 8.05 Dividend Yield 6.13% 5.96% 90-Day Average Trading Volume 3,777 2,659 TOTAL CAPITALIZATION - AS OF MARCH 31, 2005: Debt $ 92,751 $ 105,964 Class A Common Shares at Market 28,187 23,662 Class B Common Shares as Converted 17,925 19,018 Class C Common Shares as Converted 44,916 44,871 Class D Common Shares as Converted 44,190 22,372 --------- ------------ Total Capitalization $ 227,969 $ 215,887 ========= ============ Debt to Total Capitalization 40.7% 49.1% 7 AmREIT DEBT INFORMATION
AMOUNT AMOUNT OUTSTANDING OUTSTANDING INTEREST ANNUAL DEBT MATURITY DESCRIPTION 3-31-2005 12-31-2004 RATE SERVICE DATE - ---------------------------------- ----------- ----------- ----------- ----------- ----------- Credit Facility* $ 25,127 $ 38,014 4.40% $ 1,673 10/4/2005 ----------- ----------- 2005 MATURITIES $ 25,127 $ 38,014 MacArthur Park $ 13,410 $ 13,410 6.17% $ 827 12/1/2008 ----------- ----------- 2008 MATURITIES $ 13,410 $ 13,410 Hollywood Video, MS $ 943 $ 946 8.38% $ 91 4/1/2009 ----------- ----------- 2009 MATURITIES $ 943 $ 946 Merger Dissenters $ 760 $ 760 5.47% $ 43 7/23/2010 ----------- ----------- 2010 MATURITIES $ 760 $ 760 Sugarland IHOP $ 1,224 $ 1,233 8.25% $ 138 3/1/2011 Sugar Land Plaza 2,330 2,336 7.60% 203 11/1/2011 ----------- ----------- 2011 MATURITIES $ 3,554 $ 3,569 Albuquerque IHOP $ 707 $ 712 7.89% $ 75 4/24/2012 Baton Rouge IHOP 1,168 1,176 7.89% 124 4/24/2012 Beaverton IHOP 828 834 7.89% 88 4/16/2012 Charlottesville IHOP 589 593 7.89% 62 4/24/2012 El Paso #1934 IHOP 710 715 7.89% 75 4/16/2012 Rochester IHOP 888 894 7.89% 94 4/16/2012 Shawnee IHOP 701 706 7.89% 74 4/18/2012 5115 Buffalo Spdwy. 2,781 2,789 7.58% 241 5/11/2012 Salem IHOP 581 585 7.89% 61 5/17/2012 Springfield IHOP 963 971 7.89% 102 6/21/2012 Roanoke IHOP 670 673 7.89% 71 7/26/2012 Centerville IHOP 1,169 1,176 7.89% 124 7/26/2012 Memphis #4462 IHOP 1,263 1,271 7.89% 134 7/19/2012 Alexandria IHOP 674 679 7.89% 71 7/19/2012 El Paso #1938 IHOP 844 849 7.89% 89 8/23/2012 La Verne IHOP 703 707 7.89% 74 8/23/2012 Memphis #4482 IHOP 732 737 7.89% 77 8/23/2012 Parker IHOP 788 793 7.89% 83 8/23/2012 ----------- ----------- 2012 MATURITIES $ 16,759 $ 16,861 Cinco Ranch $ 8,524 $ 8,555 5.60% $ 601 7/10/2013 Plaza in the Park 18,016 18,081 5.60% 1,270 7/10/2013 ----------- ----------- 2013 MATURITIES $ 26,540 $ 26,635 Bakery Square $ 4,381 $ 4,435 8.00% $ 571 2/10/2017 ----------- ----------- 2017 MATURITIES $ 4,381 $ 4,435 ----------- ----------- TOTAL MATURITIES** $ 91,475 $ 104,631 =========== ===========
8 - ---------- *Our revolving credit facility is a variable-rate debt instrument, and its outstanding balance fluctuates throughout the year based on our liquidity needs. Annual Debt Service on this debt instrument assumes that the amount outstanding and the interest rate as of December 31, 2004 remain constant through maturity. **Total maturities above is $1.3 million less than total debt as reported in our consolidated financial statements due to the premium recorded on above-market debt assumed in conjunction with certain of our 2004 property acquisitions.
March 31, % of December 31, % of 2005 Total 2004 Total ---------- ---------- ------------ ---------- Variable vs. Fixed Rate Debt: $ 25,127 27.1% $ 38,014 35.9% Variable rate debt 67,624 72.9% 67,950 64.1% ---------- ------------ Fixed rate debt $ 92,751 $ 105,964
9 AmREIT PROPERTY & TENANT INFORMATION
ANNUALIZED BASE RENT AS OF MULTI-TENANT DATE DECEMBER 31, % SHOPPING CENTERS MAJOR TENANTS CITY STATE ACQUIRED GLA 2004 LEASED - --------------------- ----------------- -------------- ----- ---------- --------- ------------ ------- MacArthur Park Kroger Dallas TX 12/27/04 198,443 $ 2,964,192 100% Plaza in the Park Kroger Houston TX 07/01/04 138,663 2,470,512 95% Cinco Ranch Kroger Houston TX 07/01/04 97,297 1,245,828 100% Bakery Square Walgreens & Bank of America Houston TX 07/21/04 34,614 849,456 100% Uptown Plaza CVS/pharmacy Houston TX 12/10/03 26,400 1,182,312 95% Woodlands Plaza FedEx/Kinkos & Rug Gallery The Woodlands TX 06/03/98 20,018 377,332 100% Sugarland Plaza Mattress Giant Sugarland TX 07/01/98 16,750 349,545 100% Terrace Shops Starbucks Houston TX 12/15/03 16,395 457,160 100% Copperfield Medical Texas Children's Pediatrics Houston TX 09/26/95 14,000 219,212 100% Courtyard at Post Oak Verizon Wireless Houston TX 06/15/04 13,597 477,360 100% San Felipe and Winrock (1) Houston TX 11/17/03 8,400 ** ** --------- ------------ ------ Multi-Tenant Shopping Centers Total 584,577 10,592,909 98%
ANNUALIZED BASE RENT AS OF DATE DECEMBER 31, % SINGLE TENANT (GROUND LEASES) CITY STATE ACQUIRED GLA 2004 LEASED - ---------------------------------------- -------------- ----- ---------- --------- ------------ ------ CVS Corporation Houston TX 01/10/03 13,824 $ 327,167 100% Darden Restaurants Peachtree City GA 12/18/98 6,867 79,366 100% Carlson Restaurants Hanover MD 09/16/03 6,802 141,674 100% 410-Blanco (1) San Antonio TX 12/17/04 5,000 ** ** Bank of America Houston TX 11/17/03 4,420 247,975 100% Comerica Bank (1) Houston TX 04/30/04 4,277 ** ** Washington Mutual Houston TX 12/11/96 3,685 98,160 100% Washington Mutual The Woodlands TX 09/23/96 3,685 61,060 100% Yum Brands (2) (3) Houston TX 10/14/03 2,818 79,440 100% --------- ------------ ------ Single Tenant (Ground Leases) Total 51,378 1,034,842 100%
10
ANNUALIZED BASE RENT AS OF DATE DECEMBER 31, % SINGLE TENANT (FEE SIMPLE) CITY STATE ACQUIRED GLA 2004 LEASED - ------------------------------------------- -------------- ------- ---------- --------- ------------ ------ Vacant (2) Baton Rouge LA 06/09/97 20,575 ** 0% Baptist Memorial Medical Plaza Memphis TN 07/23/02 15,000 222,643 100% Comp USA Roseville MN 07/23/02 15,000 267,584 100% Energy Wellness Sugarland TX 07/23/02 15,000 187,857 100% Transworld Independence MO 07/23/02 14,047 135,000 100% Entertainment Golden Corral Houston TX 07/23/02 12,000 182,994 100% Golden Corral Humble TX 07/23/02 12,000 181,688 100% Carlson Restaurants Houston TX 07/23/02 8,500 200,000 100% Pier One Imports Inc. Longmont CO 07/23/02 8,014 135,152 100% Hollywood Entertainment Corp. Lafayette LA 10/31/97 7,488 150,874 100% Hollywood Entertainment Corp. Ridgeland MS 12/31/97 7,488 155,067 100% Radio Shack Corporation Dallas TX 06/15/94 5,200 108,900 100% IHOP Corporation #1483 Sugarland TX 09/22/99 4,020 188,112 100% IHOP Corporation #1737 (6) Centerville UT 07/25/02 4,020 160,849 100% IHOP Corporation #4462 (6) Memphis TN 08/23/02 4,020 176,768 100% IHOP Corporation #5318 Topeka KS 09/30/99 4,020 156,395 100% Payless Shoesources Inc. Austin TX 07/23/02 4,000 80,000 100% AFC, Inc. Atlanta GA 07/23/02 2,583 119,279 100% Jack in the Box Inc. Dallas TX 07/23/02 2,238 78,729 100% (4) Advance Auto (1)(2)(3)(5) Various Various Various 49,000 ** ** --------- ------------ ------ Single Tenant (Fee Simple) Total 214,213 2,887,891 88%
ANNUALIZED BASE RENT AS OF DATE DECEMBER 31, % SINGLE TENANT (LEASEHOLD) CITY STATE ACQUIRED GLA 2004 LEASED - ------------------------------------------- -------------- ------- ---------- --------- ------------ ------ IHOP Corporation (6) Various Various Various 60,300 $ 1,565,674 100% --------- ------------ ------ Company Total GLA/% Leased 910,468 16,081,316 97%
- ---------- (1) Under Development (GLA represents proposed leaseable square footage). (2) Held for Sale (3) Held in joint venture of which we are the managing 50% owner (4) Property was sold subsequent to December 31, 2004 (5) Advance Auto properties are located in MO and IL. Each of the properties has a proposed GLA of 7,000 square feet. (6) IHOP properties are located in NM, LA, OR, VA, TX, CA, TN, CO, VA, NY, OR, KS, UT and MO. Each of the properties has a GLA of 4,020 square feet. These properties are held by a consolidated subsidiary, 79.0% of which is owned by AmREIT, 19.6% of which is owned by AmREIT Income & Growth Corporation, one of our affiliated retail partnerships, and 1.4% of which is owned by unaffiliated third parties. 11 TOP 10 TENANTS BY REVENUE CONCENTRATION AS OF MARCH 31, 2005: % OF TOTAL RENTAL OPERATING TENANT INCOME REVENUE - --------------------------------------------- ------------ ------------ Kroger $ 626 7.6% IHOP 562 6.8% CVS/pharmacy 236 2.9% Golden Corral Corporation 158 1.9% Linens N Things 155 1.9% Landry's, Inc. 129 1.6% Bank of America 110 1.3% Barnes & Nobel 95 1.1% Carlson Restaurants Worldwide 85 1.0% Hallmark 82 1.0% ------------ ------------ Total $ 2,238 27.1% LEASE EXPIRATIONS BY YEAR: NUMBER OF LEASE SQUARE PERCENT EXPIRATION YEAR EXPIRING FOOTAGE OF TOTAL - -------------------------------- ------------ ------------ ------------ 2005 ........................... 14 37,450 4.40% 2006 ........................... 18 45,589 5.35% 2007 ........................... 9 51,431 6.04% 2008 ........................... 17 63,560 7.47% 2009 ........................... 21 74,732 8.78% 2010 ........................... 9 43,797 5.14% 2011 ........................... 25 125,064 14.69% 2012 ........................... 8 55,039 6.46% 2013 ........................... 2 11,131 1.31% 2014 ........................... 5 8,050 0.95% 2015 ........................... 0 0 0.00% 2016 ........................... 1 15,120 1.78% 2017 ........................... 0 0 0.00% 2018 ........................... 0 0 0.00% 2019 ........................... 3 12,838 1.51% 2020 ........................... 3 71,413 8.39% 2021 ........................... 2 82,265 9.66% 2022 ........................... 1 4,020 0.47% 2023 ........................... 1 63,373 7.44% 2024 ........................... 4 26,284 3.09% 2025 ........................... 6 32,100 3.77% 2026 ........................... 4 16,080 1.89% 2027 ........................... 3 12,060 1.42% ------------ ------------ ------------ Totals 156 851,396 100.00% 12 -----END PRIVACY-ENHANCED MESSAGE-----